The G7e or more appropriately the G7e/T2, G7e/T3, and G7e/T4 Falketorpedoes were, with the exception of the T4 model, the standard torpedoes for Germany during World War II. All of the G7e models shared standardized dimensions for all German torpedoes designed for use by U-boats during World War II, they measured 53.3 cm (21 inches) in diameter, 7.16 m in length, and carried a Schießwolle 36[1] (a mixture of explosives) warhead of 280 kg. All were powered by 100 hp (75 kW) electric motors and lead-acid batteries which needed constant maintenance to maintain their reliability. Additionally, the batteries of these torpedoes needed to be preheated to a temperature of 30 °C (85 °F) to operate with maximum speed and range, though generally this was a non-issue as U-boats had the element of surprise and often had the advantage of firing the first shot.

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The T2 model of the G7e was in service with German U-boat fleets from the first day of World War II. In stark contrast with the G7a steam-driven torpedo, the T2 left no visible stream of bubbles to alert ships that they were under attack, and was virtually silent; however, these were the T2's only advantages over the G7a torpedo. In all other respects, the T2 was barely functional and performed abysmally when compared to the G7a. Its range was much less than the G7a's at only 3000 m, and it ran much slower at 30 knots (56 km/h).

Poor range and speed were not the T2's only problems. Both of its detonators were very flawed. The magnetic influence mechanism, designed to allow the torpedo to run under the keel of a ship and detonate, breaking the ship's back, was completely inconsistent; often a T2 would detonate prematurely, or not at all. In the first engagement between a U-boat and a capital ship in the war, U-39 accurately fired three magnetically fused T3s at HMS Ark Royal, all of which detonated prematurely without effect and exposed her position to the British force, which promptly sank her. This led the BdU to order that all G7e/T2 torpedoes be fired only for contact detonation. However, the contact pistol of the T2 was miserably flawed as well; the British battleship HMS Nelson managed to narrowly survive almost certain destruction when three perfectly targeted, impact-fused T2s from U-56 struck simultaneously on her keel and broke themselves without detonating. Captain Wilhelm Zahn of U-56 was so depressed by the evident futility of his efforts that he needed to be briefly relieved of duty by Admiral Karl Dönitz in order to compose himself, while the civilian Naval Ordnance Corps, responsible for torpedo development and maintenance, continued to insist the U-boat captains were somehow at fault. Estimates of the failure rate of T2 torpedoes for one reason or another range between 20% and 40%, a staggeringly negligent figure considering the centrality of the torpedo to the U-boat's effectiveness, the criticality of the U-boats to the Battle of the Atlantic, and the requirement of winning the commerce war at sea in order to have any hope of defeating Britain in a prolonged war. Because of the complicated politics of the powerful German military-industrial establishment (exacerbated by the internecine conflicts so common to Hitler's Germany), no one was ever held accountable or punished for these failures.

Nevertheless, the German Navy, after many recriminations and counter-recriminations along with much prodding by German U-boat Command (BdU), eventually admitted and (grudgingly) invested resources into correcting the T2's flaws. Gradually it was improved, and by the end of the Norwegian Campaign problems with the contact exploder and depth-keeping gear had been mostly solved, with significant strides made in improving the magnetic proximity feature. At the same time, the T2's range was increased from 3000 m to 5000 m and eventually 7500 m. By that time, however, the T2 was already being phased out of production.

Improvements in the design of the G7e/T2 were incorporated into the production of the next model of electric torpedo for Germany's U-boat fleet. Introduced in 1942, the T3 represented a vast improvement over the early T2. The faulty exploders from the T2 were scrapped in favor of a new design.

The T3 had a range of 5000 m and could achieve 30 kt. With the improved design of the T3 and the new exploder, the G7a steam torpedo was totally superseded and was rarely used for the remainder of the war. Using the T3's perfected proximity feature, U-boat captains could effectively fire under the keel of a ship and break the back of their targets with a single torpedo, increasing the overall effectiveness of the U-boat fleet. The T3 could be fitted with both the FaT (Flächenabsuchender Torpedo) and LuT (Lagenunabhänger Torpedo) pattern running systems for convoy attacks.

Though many opportunities had been missed due to the defects of the T2 torpedo, with the new T3 U-boats were deadlier than ever.

The T4 Model was the adjunct of the earlier T3 model in nearly every way. The T4 was not an ordinary straight-running torpedo, however; it was the world's first acoustic homing torpedo. It ran at 20 kt (37 km/h) for 7500 m and was introduced in March 1943.

Early in 1933 Germany started development and testing of acoustic homing mechanisms for torpedoes. From the outset of submarine warfare, submariners had dreamt of being able to aim and fire torpedoes without surfacing or using a periscope. The periscope gives away the location of a submarine, and a hull-penetrating periscope greatly weakens a submarine's pressure hull and limits the depths to which it can dive. U-boats also had to come to very shallow depths to use their periscopes, generally about 15 m, leaving them greatly exposed to bombing, depth charging, and even gunfire.

With the introduction of Falke, U-boats could remain more deeply submerged and fire at convoys with nothing to give away their position but the noise of their screws. Rather than aiming with a periscope, the torpedo could be roughly aimed at a sound contact as detected by a U-boat's hydrophones, and the homing mechanism could be trusted to find the target without the need for precise aiming.

Falke worked much like a normal straight-running torpedo for the first 400 m of its run, after which its acoustic sensors became active and searched for a target. The sensitive sound sensing equipment in Falke required the torpedo be as quiet as possible, hence it ran at only 20 knots (37 km/h); in addition, the firing U-boat was forced to stop its motors. Falke was intended to home on merchant targets, however, so its slow speed was not a great hindrance.

Only known to have been fired in action by three U-boats, U-221, U-603 and U-758, although regarded as successful, resulting in the sinking of several merchants, and its performance rated satisfactory, Falke was rapidly phased out of service. It was replaced by the G7es/T5 "Zaunkönig" (referred to by the Allies as GNAT, for German Navy Acoustic Torpedo), which was faster and better able to home onto the sound of fast moving warships as well as merchant traffic.

Though its period of operational service was brief, Falke was a proof of concept for the acoustic homing torpedo. Its introduction occurred only two months before the U.S. Navy achieved its initial combat success with the Mark 24 FIDO "mine." FIDO was not a mine, but a passive, acoustic-homing torpedo designed for use by long-range patrol aircraft. (It was designated a mine for security reasons.) The initial success with the Mark 24 occurred on 14 May 1943, when a PBY-5 from VP-84 sank U-640 with the new weapon. Most sources indicate that the Germans' first combat success with the Zaunkönig (GNAT) did not occur until September 1943. While the Allies became aware in September 1943 that the Germans had brought GNAT into operational service, it was not until the capture of U-505 in June 1944 that they obtained reliable data on the German homing torpedo.